Topic

Strategic Interpretations

Abstract

We study strategic communication when the sender can influence the receiver's understanding of messages' equilibrium meaning. We focus on a pure
persuasion setting, in which the informed sender wants the uninformed receiver to always choose "accept". The sender's strategy maps each state of
Nature to a distribution over pairs consisting of: (i) a multi-dimensional message, and (ii) a "dictionary" that credibly discloses the state-dependent distribution of some of the message's components. The receiver does not know the
sender's strategy by default; he can only interpret message components that
are covered by the dictionary he is provided with. We characterize the sender's
optimal persuasion strategy and show that full persuasion is possible when the
prior on the acceptance state exceeds a threshold that quickly decreases with
message dimensionality. We extend our analysis to situations where interpretation of messages is done by a third party with uncertain preferences, and
explore alternative notions of "dictionaries".